A founder gets restricted stock at incorporation, signs the paperwork, and files it in a drawer. Thirty days later the cheapest tax decision the company will ever offer has expired, and nothing in the code brings it back.
That is unusual, and it's worth saying plainly, because most tax mistakes are fixable. You can amend a return. You can ask for relief on a missed election. The 83(b) election sits outside all of it, because Congress put the deadline in the statute rather than leaving it to Treasury. Section 83(b)(2) says the election "shall be made not later than 30 days after the date of such transfer," and no extension provision follows.
What the election changes
Stock that vests over time is property that is substantially nonvested. Left alone, section 83(a) taxes it as it vests: each tranche is ordinary compensation income, measured at that tranche's fair market value on the day it vests. If the company is worth more in year three than it was at incorporation, you pay compensation rates on the increase.
An 83(b) election moves the whole measurement back to the transfer date. You include the excess of the stock's fair market value at transfer over what you paid for it, determined without regard to any lapse restriction. A founder who buys 8,000,000 shares of common at $0.0001 on the day the company is formed is looking at a fair market value and a price that are the same figure, so the amount included is zero.
Two consequences follow. Your basis becomes what you paid plus what you included, and the substantial vesting rules stop applying to that stock, so no further compensation income arises as it vests. What happens after that is capital gain or loss when you sell. That is the entire point: convert future appreciation from compensation into capital, at a moment when the spread costs you nothing.
The 30 days run from the transfer
The clock starts on the date the property is transferred, which is the date you acquire a beneficial interest in the stock. It does not start when the board consent gets countersigned, when the certificate shows up in your cap table software, or when you pay. If the stock purchase agreement is dated a Tuesday and the wire goes out the following Monday, settle in writing which date is the transfer date before anybody starts counting.
You can also go early. The regulation says the election "may be filed prior to the date of transfer," which is useful when the paperwork closes on a Friday and you would rather not carry a deadline in your head for a month.
If day 30 lands on a Saturday, a Sunday, or a legal holiday, section 7503 moves it to the next day that isn't one of those, and the election is timely if it is postmarked then. That is the only give in the schedule.
Nothing extends it
There is a general relief provision for missed elections, and founders reach for it. It does not reach this one.
Treasury's rules sort elections into two kinds. A regulatory election is one whose due date is set by a regulation, a revenue ruling, a revenue procedure, a notice, or an announcement. A statutory election is one whose due date is set by statute. The discretionary relief in section 301.9100-3, the "acted reasonably and in good faith" standard that gets a taxpayer a late election, is available for regulatory elections only. The automatic extension in 301.9100-2 does reach statutory elections, but only where the deadline is the due date of a return. A deadline of 30 days after a transfer is neither of those things.
Plan the filing as though there is no remedy, because there isn't one.
The form is optional, the content isn't
The IRS publishes Form 15620, Section 83(b) Election, revised April 2025. It runs to one page and nine boxes. The IRS wrote it so that people would stop drafting their own.
Using it is voluntary, which the form's own instructions state, and section 1.83-2 still allows the election to be made by filing a written statement instead. A statement has to be signed, has to say it is being made under section 83(b) of the Code, and has to carry every one of these:
- your name, address, and taxpayer identification number
- a description of each property the election covers
- the date of transfer, and the taxable year the election is being made for
- the nature of the restrictions the property is subject to
- the fair market value at transfer, determined without regard to any lapse restriction
- the amount, if any, you paid for the property
- a statement that copies have been furnished to the other people entitled to them
That last item is the one template letters drop. It has been a required element for elections made after July 21, 1978, and a letter without it is a letter that doesn't satisfy the regulation. Form 15620 prints the representation above the signature line, so a signed form carries it whether or not you thought about it, which is the practical argument for using the form over a letter your lawyer's assistant adapted from another deal.
One box genuinely is optional. Box 9 asks for the name, taxpayer identification number and address of the person you are providing services to, and the instructions say a response there is not required for a valid election.
Where it goes, and the copy rule most templates get wrong
The election is mailed to the IRS office where you file your own federal income tax return. Not the office where the company files, and not an address somebody has in a template. Form 15620 says to submit it by mail, and there is no electronic filing route for it. Pull the current Where to File address for your state off irs.gov rather than reusing one from an old letter, because those addresses move between filing seasons.
You also have to give a copy to the company you are performing services for, and, if you and the transferee of the stock are not the same person, a copy to the transferee.
What you no longer do is attach a copy to your tax return. Revenue Procedure 2012-29 required exactly that. Final regulations issued in July 2016 removed the second sentence of section 1.83-2(c), which had imposed it, and revoked the revenue procedure to the extent it was inconsistent. The change applies to property transferred on or after January 1, 2016. Most of the 83(b) instructions circulating online still tell founders to staple a copy to the 1040. Doing it anyway harms nothing, but it is not the rule, and a preparer who says your return is deficient without it is working from a version that was superseded almost a decade ago.
Proving you filed
The IRS sends no acknowledgment. The election disappears into a service center and you hear nothing back, so the evidentiary record is entirely whatever you kept.
Section 7502 gives you the timely-mailing rule: the postmark date counts as the delivery date, as long as the postmark falls inside the 30 days and the envelope was properly addressed with postage paid. That settles timeliness. Delivery is the harder question, and the regulation is unusually blunt about it. Other than direct proof of actual delivery, proof of proper use of registered mail, certified mail, or a designated private delivery service are the exclusive means of establishing prima facie evidence that a document reached the IRS. It goes on to say that no other evidence of a postmark or of mailing will raise a presumption of delivery.
Read that the way it is written. A stamped envelope in a blue box, a photo of that envelope, a calendar reminder, a signed copy in your files: none of it is evidence of delivery. A certified mail sender's receipt, postmarked by the clerk who took the envelope, is. It costs a few dollars and it is the only part of this that can't be reconstructed later.
Then keep it. When Treasury dropped the attach-to-return requirement, the preamble reminded taxpayers that a copy of an 83(b) election has to be kept until the period of limitations expires for any return on which the income inclusion or the basis of the property is relevant. Basis stays relevant until you sell the stock and the statute runs on that year's return, which for founder stock can be ten years or more. Scan the signed form and the certified mail receipt together on the day you mail them, and put the scan somewhere that outlives the laptop.
What it costs if the stock goes the other way
The election is a bet, and it is only cheap while the spread is zero.
Where fair market value at transfer exceeds what you paid, you owe ordinary income tax on the difference now, in cash, on stock you can't sell. That is the position of someone joining a company that already has a 409A valuation above the price they are paying, and it is why the answer is close to automatic for a founder at incorporation and a real calculation for an employee taking restricted stock in year four.
If the stock is later forfeited, the statute leaves no room: no deduction is allowed in respect of the forfeiture. The regulation treats the forfeiture as a sale or exchange producing a loss equal to what you paid for the property minus whatever you realized on the forfeiture. The income you recognized and the tax you paid are not in that computation. That money is gone.
Revoking it
For practical purposes you can't. An election may be revoked only with the Commissioner's consent, consent is granted only where the person who made it was under a mistake of fact about the underlying transaction, and the request has to be made within 60 days of the date the mistake first became known.
The regulation then shuts the two doors people want open. A mistake as to the value of the property, or a decline in that value, is not a mistake of fact. Neither is a failure to perform an act that was contemplated at the time of the transfer. Regretting the bet is not grounds.
What the company keeps
The founder's obligation to hand the company a copy is not a courtesy. That copy is the company's own documentation, and it belongs with the stock purchase agreement and the board consent that authorized the issuance rather than in somebody's email. Diligence requests ask for it by name, and what an investor's counsel wants to see is the signed election together with the proof of mailing.
Where the amount included in income is anything other than zero, the company has a compensation event of its own to record, with payroll reporting behind it if the recipient is an employee. Deal with that when it happens. Finding it during a year-end close, with a transfer date twelve months old and the person who signed the paperwork gone, turns a bookkeeping entry into an investigation.
None of this replaces having your own preparer or counsel look at the actual grant. It is a description of what the rules say, and these particular rules are less forgiving than most.